Many
Civilian Agencies, Intelligence Agencies, Joint Forces and Department of
Defense are looking for better ways to have a consistent methodology for decision
reliability of program, capability and/or project trade-off analysis. For
example, many capability and program managers attempt to justify a 'rack and
stack' practice by using desk top tools such as spreadsheets, word processing
documents and slide deck presentations to calculate and present a
prioritization analysis. This subjective practice requires intense meetings, biased input,
skewed calculations and in many cases, outdated information. The goal is to determine right decisions in a way that is systematic, audit-able and repeatable. A more standard
and quantifiable approach for optimal decision reliability of program, capability
and/or project trade-off analysis is using the Analytic Hierarchy Process. The
Analytic Hierarchy Process (AHP) is a structured technique for dealing with
complex decisions which provides the following capabilities:

Rather than prescribing a
"correct" decision, the AHP helps decision makers find one that
best suits their goal and their understanding of the problem.

It is a process of organizing
decisions that people are already dealing with, but trying to do in their
heads.

The AHP converts these
evaluations to numerical values that can be
processed and compared over the entire range of the problem.

A numerical weight or priority
is derived for each element of the hierarchy, allowing diverse and often incommensurable
elements to be compared to one another in a rational and consistent
way.

The
following figure is an example using AHP for selecting a leader where weighted quantifiable
criteria such as Experience, Education, Charisma and Age is taken into
consideration. You can click the image to enlarge the view in your browser.

Not only
does Rational Focal Point provide users the ability to 'rack and stack' input
allows portfolio managers and decision makers to correlate stakeholder input
with other weighted criteria such as strategies, costs, risks, time, resources,
return on investment, scope and configurable metrics to your agency. This gives agencies an optimal 'what-if'
scenarios based on risk/cost/benefit analysis. The following figure is a screen
shot of Rational Focal Point 'rack and stack' visualization which correlates Risk,
Harms Way, Expenses (Cost), Command Value, Financial Feasibility, Mission
Objectives and Technical Feasibility. You can click the image to enlarge the view in your browser.

Capital Planning & Investment Control (CPIC) along with
optimal Decision Reliability is a critical process for all government agencies.
In order to effectively manage programs and capabilities, government agencies
need an effective way to select, control and evaluate program portfolio
management. The federally mandated CPIC process is a structured, integrated
approach to managing IT investments.

Its purpose is to ensure all IT
investments align to the agency mission and support business needs, while at the
same time minimizing risks and maximizing returns throughout an investments
life cycle. CPIC relies on a systematic approach using 3 distinct phases:
select, control, and evaluation.

IBM's Focal Point tool has critical and unique attributes to help
agencies optimize a smarter investment lifecycle by leveraging a quantifiable
approach rather than a subjective and sometimes irrational techniques. A government agency trying to adhere to the CPIC process needs a
configurable portfolio platform with best practices to capture investment
candidates, improve strategic alignment, leverage voice of the stakeholders and
quantifiable weighted criteria trade-off analysis (cost/risk/benefit).And the weighted trade-off analysis should
consist of approval workflow stage gate processes using standard methodologies
such as Analytic Hierarch Process.

Even when the agency does heavy up-front planning, there are
always constraints impacting agencies that need to be dealt with in real time.
For instance, budget cuts or restrictions on personnel resource planning. These
constraints require corrective action that is well informed and allows for
realignment of the program portfolio, as well as ongoing portfolio governance
and budget change realignment. The ability to 'rack and stack' the portfolios
of programs and capabilities using a quantifiable standard approach enables the
much needed portfolio governance and change management.

The Analytic Hierarchy Process (AHP) is a structured technique for
dealing with complex decisions.Rather
than prescribing a "correct" decision, the AHP helps decision-makers
find one that best suits their goal and their understanding of the problem. It
is a process of organizing decisions that people are already dealing with, but
trying to do in their heads. The AHP converts these evaluations to numerical
values that can be processed and compared over the entire range of the problem.
A numerical weight or priority is derived for each element (portfolio asset
such as programs) of the hierarchy, allowing diverse and often incommensurable
portfolio assets to be compared to one another in a rational and consistent
way.

In addition to an optimal portfolio decision value-add process,
agencies need visibility into benefits realization and earned value management.
Not only does the Rational solution assist with planned versus earned
identification, you are also able to leverage smarter application and
architecture portfolio management for effective decision making regarding
application redundancies, transformations, rationalizing, modernization and
'to-be versus as-is' impact analysis. As agencies improve (mature) in the
select and control phases of Capital Planning and Investment Control,
portfolios still need to have an on-going evaluation and assessment phase. The
Rational solution gives users the capability to delivery business intelligence
and analytics at your finger tips with executive and role-based dashboards as
well as reports. For example, this improves the process of collecting,
automating, communication collaboration, performance monitoring, financial
reporting (such as Exhibit 300 support), capability investment improvements and
analytical assessments for agencies based on agency specific or standard
taxonomy classifications.

By leveraging the Rational Software and Services Solution,
agencies gain an optimal and improved maturity for supporting Capital Planning
& Investment Control legislation while taking advantage of structured
methods and best practices for effective smarter investment lifecycle decision
processes.

I recently had the opportunity to join forces with an IBM
technical architect, Jim Amsden and record a webinar about the capital planning
process. It was an interesting experience to team with Jim because he is an
expert in enterprise architecture and focuses on municipal and local
governments. On the other hand, I came to the table with portfolio management
expertise and a focal on federal government agencies. The result of our
conversations and collaboration was this webcast: Leveraging IT to enable the business of government